Falling into the Credit Card Trap

Credit card debt can be a nightmare and it’s pretty easy to fall prey to. The reason behind all this is that people don’t understand the basic concept of credit cards. People treat them like free money. Yes, its like having a good time on a dime you don’t have to pay back. It makes people overspend which leads to credit card debt. When you hit the overspending amount you wind up paying back interest and not the money itself. When you realize you can do much with that card you get another and that’s where credit card debt begins. Then the credit card consolidation comes in. Not because they want to reduce credit card debt, but because of the low APR that they offer.

While they think they are getting back to building good credit, they are actually killing it, which then leads to a bad credit history because of the money they owe. I call this turning yourself upside down, you owe out more money than you have coming in. Now they can only get a secure credit card, where you put money on the card before you can spend it. Pretty soon any credit card agencies auction off your goods and bankruptcy kicks in. The dream is gone , you have gone from Steak to crow. The moral is, understand the concept of credit cards. To learn more, click here.

Now to credit card consolidation, this is a strategy so you can consolidate debt from a lot of credit cards to maybe one or two. This is also known as a balance transfer , where one credit card picks up the other. Sometimes a bad loan with a lower APR will pick up the balance, and you will have only one monthly payment. When considering consolidation always checks the time period when an 0% APR is valid. So if you are confident and can pay back a considerable amount in a 6 to 12 month period this credit solution will work for you. If this is not the case then you will have to go with the long term APR. Also check processing charges for bank or credit card consolidation with another bank. You can also contact you credit card bank . You will be surprised at how they can lower your interest rates and eliminate the need for consolidation. Remember to develop good spending habits, otherwise credit debt consolidation will be of no use to you.

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